Key figures as of March 31, 2013

Transcription

1 Key figures as of March 31, 2013 Conference call May 3, 2013 Pierre François Riolacci Chief Financial Officer François Bertreau Chief Operating Officer

2 Disclaimer Veolia Environnement is a corporation listed on the NYSE and Euronext Paris. This document contains "forward looking statements" within the meaning of the provisions of the U.S. Private Securities Litigation Reform Act of Such forward looking statements are not guarantees of future performance. Actual results may differ materially from the forwardlooking statements as a result of a number of risks and uncertainties, many of which are outside our control, including but not limited to: the risk of suffering reduced profits or losses as a result of intense competition, the risks associated with conducting business in some countries outside of Western Europe, the United States and Canada, the risk that changes in energy prices and taxes may reduce Veolia Environnement's profits, the risk that we may make investments in projects without being able to obtain the required approvals for the project, the risk that governmental authorities could terminate or modify some of Veolia Environnement's contracts, the risk that our long term contracts may limit our capacity to quickly and effectively react to general economic changes affecting our performance under those contracts, the risk that acquisitions may not provide the benefits that Veolia Environnement hopes to achieve, the risk that Veolia Environnement's compliance with environmental laws may become more costly in the future, the risk that currency exchange rate fluctuations may negatively affect Veolia Environnement's financial results and the price of its shares, the risk that Veolia Environnement may incur environmental liability in connection with its past, present and future operations, as well as the risks described in the documents Veolia Environnement has filed with the U.S. Securities and Exchange Commission. Veolia Environnement does not undertake, nor does it have, any obligation to provide updates or to revise any forward looking statements. Investors and security holders may obtain a free copy of documents filed by Veolia Environnement with the U.S. Securities and Exchange Commission from Veolia Environnement. This document contains "non GAAP financial measures" within the meaning of Regulation G adopted by the U.S. Securities and Exchange Commission under the U.S. Sarbanes Oxley Act of These "non GAAP financial measures" are being communicated and made public in accordance with the exemption provided by Rule 100(c) of Regulation G 2

3 Highlights and key figures as of March 31, 2013

4 Commercial business success Water Australia: industrial contract awarded by Queensland Gas Company in the coal gas sector. Cumulative revenue of 650M over 20 years Canada: industrial contract awarded by K+S Potash Canada Environmental Services France: contract renewal for municipal waste management in the Grand Nancy urban community. Cumulative revenue over 7 years: 91M France: inauguration of the Osilub used oil regeneration plant (in partnership with Total) Singapore: contract awarded for the collection and management of municipal waste and recycling in the Clementi Bukit Merah district. Cumulative revenue of roughly 138M over 7 ½ years Energy Services Contract renewal for the management of heat generation and distribution in Bratislava. Cumulative revenue of 1.1bn over 20 years 4

5 Key figures for the three months ended March 31, 2013 In M March 31, 2012 published March 31, 2012 re presented (1) March 31, 2013 Δ Δat constant FX Revenue 7,826 5,991 5, % 3.2% (2) Adjusted operating cash flow % 6.3% Operating income % Operating income after share of net income of equity accounted entities (3) % Adjusted operating income (4) % 1.2% Gross investments Free cash flow Net Financial Debt 15,021 12,746 10,106 Loans granted to joint ventures 3,587 3,304 Adjusted Net Financial Debt 9,159 6,802 (1) Q re presented for IFRS 5, 10 and 11 (IFRS 5 adjustment applies only to the income statement, see Appendix 1) (2) 3.0% at constant consolidation scope and exchange rates (3) Including the share of net income of joint ventures and associates (4) Including the share of adjusted net income of joint ventures and associates 5

6 Water Revenue declined by 3.8% at constant scope and exchange rates to 2,494M Operations: Revenue declined 2.4% at constant scope & FX to 1,702M France: decline of 3.5% at constant scope Construction revenue down Continued contractual erosion Lower volume trend by 1.5% in Q1 Continued favorable price indexation Outside France: decline of 1.5% at constant scope & FX Timing of the end of certain contracts resulting in a slowdown in Construction activity (UK, Korea) Favorable impact of higher tariffs (Asia, Central & Eastern Europe) Technologies and Networks: Revenue declined 6.9% at constant scope & FX to 792M Completion of D&B municipal and industrial contracts Good performance in Solutions activity with industrial clients Decline in adjusted operating cash flow and adjusted operating income (1) Contractual erosion in France Decline in Construction margins Operations Favorable impact of net income from Chinese joint ventures Technologies and Networks and the Convergence Plan 6 (1) Including the share of net income of joint ventures and associates 2,611 Revenue (in M) , % 7.3% 3.1%

7 Environmental Services Revenue declined by 4.6% at constant scope & exchange rates to 1,932M Revenue variation 3M2013 / 3M2012: 6.4% Price and volumes of recycled materials 2.5% Waste volumes / activity levels 3.5% Service price increases +0.9% Other +0.5% Currency effect 0.6% Scope 1.2% Evolution of Revenue by country: France: decline in activity (difficult macro economic environment and repeated bad weather in the first quarter of 2013) and unfavorable impact of recycled raw material prices Germany: impact of the decline in prices and volumes of recycled raw materials and decline in the industrial and commercial sector UK: increase in PFI construction revenue and higher tonnages incinerated USA: increase in hazardous waste treatment and decline in industrial services Asia Pacific: good performance in Australia Decline in adjusted operating cash flow and adjusted operating income (1), despite the impact of the Convergence Plan, related to: Decline in volumes The unfavorable impact of lower prices and volumes of recycled raw materials (1) Including the share of net income of joint ventures and associates 7

8 Energy Services Revenue increased 0.4% at constant scope and exchange rates to 1,268M Stable revenue in France ( 0.7% at constant scope) Favorable impact of higher energy prices (+ 25M) and weather Progressive end of gas cogeneration contracts Competitive business environment In the United States, significant revenue increase at constant scope and FX Slight increase in adjusted operating cash flow and adjusted operating income (1), due to growth in Dalkia International, driven by: Weather impact Favorable evolution of volumes in Poland, the Czech Republic and Lithuania Positive impact of Italy restructuring Revenue (in M) 1,276 1, % +17.2% 1.8% (1) Including the share of net income of joint ventures and associates United States France 8

9 Implementation of Convergence: Q results Cost reductions/ Convergence 1: 39M net savings at March 31, 2013 (before application of IFRS 10 11) Impact before IFRS (in M) Year ended December 31, 2012 Quarter ended March 31, 2013 Gross savings Implementation costs Net savings Post IFRS VE contribution Operating income impact: 31M 9

10 Continued reduction in Net Financial Debt Net financial debt reduction of 716M CAPEX of 335M, versus 472M in Q Variation in working capital of 675M Hybrid + 1,470M Adjusted net financial debt of 6.8bn versus re presented 7.8bn at December 31, 2012 Divestments: 5bn completed in 2012 (1) & 1bn objective in 2013 (2) Mars 7, 2013: Signature of purchase agreement for the divestment of Moroccan Water activities to the Actis investment fund ( 370M) 88M in associated debt reduction expected in 2013 March 21, 2013: Signature of purchase agreement for the divestment of Portuguese Water activities to Beijing Enterprise Water Group ( 95M) (1) Before application of IFRS 10 & 11 and including the debt reduction of 1.4bn related to the change to equity method accounting for the Berlin Water contract on October 31, 2012 (2) Including repayments of loans granted to joint ventures related to divestments 10

11 Update on Convergence Plan

12 Implementation of Convergence: continued growth in savings In M (1) (1) Of which due to the new accounting treatment of joint ventures, ~80% will benefit adjusted operating income 12

13 New cost reductions targets (1/2) A 750M (1) NET COST SAVINGS PLAN IN Net impact (1) In M 400 (1) Net of implementation costs, of which due to the new accounting treatment of joint ventures, ~80% will benefit adjusted operating income 13

14 New cost reductions targets (2/2) + 280M Net Impact (1) in M Additional savings identified Transverse projects Business projects 2015 objective Purchasing Mutualization & IT Business projects HQ Efficiency Raised 2015 objective (1) Net of implementation costs, of which due to the new accounting treatment of joint ventures, ~80% will benefit adjusted operating income 14

15 Mid term objectives confirmed : Transformation Period 6 billion in divestments (1) 2013 net financial debt, under new IFRS standards: Net Financial Debt between 8bn and 9bn (2) Adjusted Net Financial Debt between 6bn and 7bn (2) Cost reductions: in 2013: 170M net impact (3) Extended dividend commitment of 0.70 (4) per share in 2013 (5) and 2014 Beginning in 2014: New Veolia Organic revenue growth > 3% per year (mid cycle) Adjusted operating cash flow growth >5% per year (mid cycle) Leverage ratio (6) of 3.0x (7) beginning in 2014 Mid term: Payout ratio in line with historic level Cost reductions in 2015: 750M net impact (3) (1) Including the debt reduction of 1.4 billion related to the change to equity method accounting for the Berlin Water contract and repayment of loans to joint ventures (2) Before closing exchange rate impact (3) Net of implementation costs, of which due to the new accounting treatment of joint ventures, ~80% will benefit adjusted operating income (4) Subject to the approval of Veolia s Board of Directors and the Annual General Shareholders Meeting (5) In cash or shares (6) Adjusted net financial debt/ (Operating cash flow before changes in working capital + OFA Repayments) (7) 5% 15

16 Appendices

17 Summary of appendices Appendix 1: Main Q figures re presented for IFRS 5 and IFRS Appendix 2: Impact of exchange rate variations Appendix 3: Breakdown of revenue by division Appendix 4: Net financial debt Appendix 5: Evolution of recycled raw material prices Appendix 6: Environmental Services revenue versus Industrial Production 17

18 Appendix 1: Main Q figures re presented for IFRS In M 3M ended March 31, 2012 published IFRS5 IFRS 10 & 11 Adjustment (1) Adjustment 3M ended March 31, 2012 Re presented Revenue 7, ,798 5,991 Adjusted operating cash flow Operating income 544 ~ Operating income after share of net income of equity accounted entities (2) Adjusted operating income (3) 544 ~ Gross investments Free Cash Flow Net Financial Debt 15, ,275 12,746 Loans granted to joint ventures 3,587 Adjusted Net Financial Debt 9,159 (1) Morocco Water and Eolfi (2) Including the re presented share of net income of joint ventures and associates for the three months ended March 31, 2012 (3) Including the re presented share of adjusted net income of joint ventures and associates for the three months ended March 31,

19 Appendix 2: Impact of exchange rate variations Depreciation of the euro 3M 2013 / 3M 2012 Average rate Closing rate Australian dollar 2.4% +4.1% UK pound sterling 2.1% 1.4% U.S. dollar 0.7% +4.1% Czech koruna 1.9% 4.1% Chinese renminbi yuan +0.6% +5.3% Impact on key Company figures Revenue Adjusted operating cash flow Adjusted operating income (1) 41M 2M 1M Net debt + 25M (1) Including the share of adjusted net income of joint ventures and associates 19

20 Appendix 3: Breakdown of revenue by division in M 5,991 5,757 Δ Δ constant FX Δ excl. FX & scope Water 4.5% 3.5% 3.8% Environmental Services 6.4% 5.8% 4.6% Energy Services 0.6% 0.6% +0.4% Other +62.4% +62.4% +20.3% TOTAL 3.9% 3.2% 3.0% 20

21 Appendix 4: Net financial debt In bn (1) Net financial debt/ (Operating cash flow before changes in working capital + OFA repayments) 21

22 Appendix 5: Evolution of recycled raw materials prices jan 08 mar 08 may 08 jul 08 sept 08 nov 08 jan 09 mar 09 may 09 jul 09 sept 09 nov 09 jan 10 mar 10 may 10 jul 10 sept 10 nov 10 jan 11 mar 11 may 11 jul 11 sept 11 nov 11 jan 12 mar 12 may 12 jul 12 sept 2012 nov 2012 jan 2013 mars 2013 Cardboard (ref. 1.05) Paper (Ref. 1.11) Metals (E40)

23 Appendix 6: Environmental Services revenue versus Industrial Production Industrial Production and Veolia Environmental Services Organic Growth Y-Y Growth Rate (in %) vs. previous year's quarter 15% 10% 5% 0% -5% -10% -15% -20% Q Q Q Q Q Q Q Q Q Q Veolia Enviromental Services Organic Growth Industrial Production Q Q Q Q Q Q Q Q Q Q Q Weighted average industrial production indices for 4 key countries, including SARP and SARPI: France, UK (excluding PFI contracts), Germany, and North America (excluding U.S. solid waste beginning in 2012) Sources : OECD Extract Database; INSEE (France, February 2013); Federal Ministry of Economics and Technology (Germany, February 2013); average of January February when March figures not available (France, UK, Germany) 23

24 Investor Relations contact information Ronald Wasylec, Senior Vice President, Investor Relations Téléphone e mail ronald.wasylec@veolia.com Ariane de Lamaze Téléphone e mail ariane.de lamaze@veolia.com 38 Avenue Kléber Paris France Fax Terri Anne Powers, Director of North American Investor Relations 200 East Randolph Street, Suite 7900 Chicago, IL Tel +1 (312) Fax +1 (312) e mail terri.powers@veoliaes.com 24